May 19's price crash in the Bitcoin (BTC) spot market wiped about $7.56 billion worth of long-leveraged positions from cryptocurrency derivatives markets. The event marked the biggest bullish leverage wipeout since March 2020. Retail and institutional investors borrowed from leading exchanges to amplify their potential returns. But a sudden reversal in Bitcoin spot rates, reportedly led by Elon Musk's anti-Bitcoin tweets over the weekend and fueled by China's reiteration of a ban on crypto transactions, blew up bulls' leverage ratios. That led to a so-called liquidity cascade in the derivatives market. In traditional markets, investors use cash as collateral to …

Decentralized exchange dTrade is bringing derivatives trading to the Polkadot ecosystem after concluding a $6.4-million seed investment round, setting the stage for wider decentralized finance use cases on the developer network. The private investment round was led by some of the biggest names in the blockchain venture capital world, including Three Arrows Capital and DeFiance. Polychain Capital, ParaFi Capital, Huobi, Mechanism Capital, Bixin Ventures, IOSG Ventures, Hypersphere Ventures and Fenbushi Capital also participated. Several companies have also stepped up to support liquidity on dTrade, including Alameda Research, CMS Holdings, MGNR, Kronos and Wintermute. Alameda Research has invested heavily in Defi …

Investors with tokenized exposure to Coinbase (COIN) shares experienced extreme volatility Tuesday, as the value of their holdings plummeted in a matter of minutes. The selloff took place on FTX, a leading derivatives exchange, where the COIN-USD stablecoin exchange rate fell from a high above $640 all the way to around $420. Three huge red candles highlighted the selloff, as per a screenshot from Bloomberg podcaster Joe Weisenthal. Coinbase tokenized shares are crashing on FTX https://t.co/PygqsjSpWQ pic.twitter.com/cl8k5hHEPX — Joe Weisenthal (@TheStalwart) April 14, 2021 At the time of writing, tokenized Coinbase shares were valued at $445 on FTX. Despite the …

In a newly released report, Swiss cryptocurrency exchange ShapeShift explores the potential role of so-called “staking derivatives” in addressing some of the challenges posed by Proof-of-Stake, or PoS, protocols. Yield Unchained: Exploring Staking Derivatives shines the spotlight on existing challenges with POS protocols – namely, the opportunity cost that comes with locking up capital in a consensus mechanism. Staking derivatives, the report says, allows users to combine the benefits of staking returns and the ability to deploy their capital in DeFi and other protocols. “Staking derivatives offer a tantalizing, best-of-both-worlds approach where users can enjoy both staking returns and the …

The Colombian Stock Exchange announced it is joining the Consorcio Colibrí, a private initiative that promotes the adoption of blockchain technology within the finance industry. As Cointelegraph Español reported on Nov. 18, Consorcio Colibrí was formed by major financial institutions such as Bancolombia, BBVA, Santander Caceis Colombia, Deceval, Contrato Marco, Porvenir and Skandia, among others. Via a partnership with member firm Contrato Marco, the CSE will use the Colibrí platform's blockchain tech to improve operational efficiency in the over-the-counter derivatives market, which is currently time-consuming, expensive and difficult to reconcile with established manual procedures, according to the CSE. CSE president …

The digital asset industry as a whole looks significantly different than it did three years ago. A Wild West-esque year, 2017 boasted astronomical asset price increases and booming fundraises amid underdeveloped regulation. Some elements of 2017, such as initial coin offerings, have largely died off. Other niches, such as derivatives trading, have since experienced watershed growth, as noted in a recent report from United States crypto exchange, Kraken. "Beginning with pioneers like Crypto Facilities, BitMEX, Deribit, BitVC (now HuobiDM), and OKEx, deriviatives trading in crypto markets really took hold in 2017, dovetailing the entrance of traditional incumbents like the CME …

Per guidance released Wednesday evening, the Commodity Futures Trading Commission (CFTC) is advising businesses trading in crypto derivatives to hold customer funds very carefully. The new guidance continues the CFTC's interest in carving out rules for custodianship of virtual currencies — an area obviously distinct from any other asset class. Per the commission: "Custodians of virtual currencies are typically not subject to a system of comprehensive federal or state regulation and oversight, which includes safeguarding of these novel assets, and this raises potential risks to the protection of customer funds held at such custodians." The specific provisions of the guidance …

Popular crypto futures trading platform Bybit is currently hosting thousands of participants for its World Series of Trading, or WSOT, competition. With roughly 12 days left before the competition concludes, 12,368 participants currently pursue 200 Bitcoin (BTC) in prize money, valued around $2.4 million, data from the exchange's WSOT page shows. Bybit unveiled its WSOT at the end of July, noting the event will occur twice per year going forward. On Aug. 10. traders threw their hats in the ring, seeking to secure the best profit/loss ratio, or P&L, prior to the event's completion on Aug. 31. The event hosts …

Cryptocurrency exchange OKEx launched saving accounts and margin trading for meme cryptocurrency Dogecoin (DOGE). According to an announcement shared with Cointelegraph on July 9, OKEx announced that leveraged spot trading, perpetual swap contract trading, and saving features will launch tomorrow for the meme-based cryptocurrency, Dogecoin. OKEx did not answer Cointelegraph’s inquiry by press time. Exchanges capitalize on the Dogecoin crazie The announcement follows a recent Dogecoin viral marketing campaign conducted by its fans on social media video platform TikTok. The campaign apparently caused the coin’s price to surge by over 124% in just two days, according to data from Coin360. …

Qiao Wang — Investor, analyst and head of product at crypto market data firm Messari — raised major criticism about the way in which the Grayscale Bitcoin Trust, or GBTC, is set up. In a June 11 tweet, Wang cites Grayscale’s official website, according to which “Grayscale Bitcoin Trust does not currently operate a redemption program and may halt creations from time to time.” He suggested that the absence of a redemption mechanism can result in GBTC trading at a discount compared to the net asset value, or NAV, of the fund’s assets. “You are just donating your money to …

Cryptocurrency exchange OKEx announced the launch of Ether (ETH) options contracts on its trading platform. According to a June 4 announcement, following today’s launch of ETH options, OKEx will also launch EOS options contracts on June 18. The firm also announced that it placed 1,000 ETH in the ETH Options insurance fund to prevent clawback. OKEx promotes options as a trading risk hedge Per the announcement, options allow traders to buy or sell the underlying asset to hedge risk and maximize profits. The announcement explains how the contract differs from futures: “Different from futures, holders don’t have to buy or …

Leading Japanese consulting firm Nomura Research Institute (NRI) partnered with cryptocurrency investment solution provider Intelligence Unit (IU) to launch a tradable cryptocurrency index. According to a press release published on Jan. 29, the new index’s name is NRI/IU Crypto-Asset Index and it is meant for use by financial institutions. The index also draws data from crypto index platform MVIS and major cryptocurrency data platform CryptoCompare. The dedicated website explains that the index is meant to cover global crypto markets in U.S. dollars and Japanese yen by tracking the largest cryptocurrencies. The index was designed for Japanese institutional investors with consideration …